Foxconn will build cars for the start of Fisker electric vehicles

While the exact location has yet to be determined, Fisker CEO Henrik Fisker said there are very good chances of initial production in the United States, in part because Foxconn already has a factory in Wisconsin.

“They have a factory and a lot of land with a lot of possibilities for expansion,” he said in an interview. “We haven’t made a final decision on that, but it’s obvious.”

Shares of Fisker were up about 17% from the news and traded around $ 19 on Wednesday morning.

Foxconn’s collaboration is for Fisker’s second model, a higher-volume electric car that the manufacturer wants to start building in the fourth quarter of 2023, the companies said. The car would be built on the basis of vehicles developed by Foxconn and would be sold in North America, Europe, China and India, they added.

For Foxconn, Fisker’s agreement is the latest in a series of links with automakers to jointly develop or build vehicles, including the then Fiat Chrysler Automobiles NV.

—Now Stellantis NV— and the Chinese group Zhejiang Geely Holding Group.

In recent years, some electric vehicle companies such as Fisker have focused on car design while outsourcing vehicle production, in a challenge to the traditional business model of the automotive sector, in which vehicle manufacturers established designed and produced their own vehicles.

The deal with Fisker is the first in which Foxconn will manufacture the vehicles, and the first with a U.S.-based electric vehicle company.

The automotive industry is facing a wave of new technology companies and startups wanting to get into the business, an effort driven in part by new technologies like electric cars and autonomous driving that are reforming the competitive landscape. Among them is Apple Inc.,

who for years has worked to develop his own car and has recently held talks with Hyundai Motor Group to assemble a standalone vehicle at a Kia Corp. plant. in Georgia. The talks have since been broken down, The Wall Street Journal reported.

Foxconn, formally known as Hon Hai Precision Industry Co., has been looking to diversify beyond its core electronics contract manufacturing business.

In 2017, Foxconn said it would invest $ 10 billion to build a liquid crystal factory in Wisconsin to produce large-screen TVs and other devices, a project that was praised by President Donald. Trump. But since then, Foxconn has reduced its ambitions to a smaller facility that would make smaller touch screens and has been in dispute with Wisconsin state officials over the scope of the project.

In October, Wisconsin officials said Foxconn had not created enough jobs to receive grants by 2019. Foxconn then said it has reached employment levels of more than 520 people, the minimum needed to get grants, and which has invested $ 750 million in Wisconsin, including more than half a billion dollars for the factory.

In driving the automotive industry, Foxconn recently launched a new project to offer a customizable base technology kit that manufacturers can use to develop electric and autonomous cars.

The company said earlier this year that the initiative, dubbed MIH, would be led by a co-founder of Chinese electric vehicle company NIO Inc.

Fisker is one of several automotive startups that has generated a surge of investor enthusiasm for purely electric vehicle companies over the past year. It was founded in 2016 by Mr. Fisker, a well-known designer who previously worked at BMW and Aston Martin.

Unlike other advances that have or build their own plants, Fisker takes a light approach to the development of its business, relying on contractors to supply everything from manufacturing to service and maintenance centers. . Executives say this will help them shy away from the billions of dollars traditionally spent by capital carmakers on assembly plants.

“The last thing an EV startup should look for is to build its own factory,” Fisker told the newspaper last year. “I think it’s a very silly idea, frankly.”

Fisker focuses on design, software and engineering. For its first model, a luxury sports vehicle called Ocean that will launch at the end of next year, subcontracts the manufacture of vehicles to the car supplier Magna International Inc.

The company began publicly trading in October after merging with a special-purpose acquisition company with the support of private equity giant Apollo Global Management Inc.

Its shares closed Monday at $ 16.29 per share, up 82% since the merger closed.

The company, which has informed investors that it expects its first earnings in 2022, will have to update investors on its first-quarter earnings as a listed company after Thursday’s close.

Write to Ben Foldy to [email protected] and Stephanie Yang to [email protected]